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| November 3, 2008 |
| Straight-Shooter Sorrell Sees Very Tough Times in `09 |
| By Kevin McCauley |
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Sir Martin Sorrell is not everybody’s cup of tea. He does have somewhat of a following, including this blogger, among those who appreciate the WPP Group CEO's reputation of being a “straight-shooter” in a business not known for executives willing to rock the boat.
 The Englishman was no shrinking violet this week as the Big Four ad/PR congloms released earnings reports to a shaky financial community. Omnicom CEO John Wren told investors `09 will be “challenging” because clients have become “very cautious.” Interpublic chief Michael Roth said it's “clear that the global financial situation has begun to weigh on marketers’ spending plans for both the fourth quarter and `09.” And colorful Frenchman Publicis CEO Maurice Levy issued a statement about mature economics entering a “zone of turbulence.” Maurice scores some points for predicting a “difficult end of `08 and a marked slowdown in `09.”
Now contrast those assessments with the report from London. Sorrell first confesses that his savvy forecasters dropped the ball on the “Beijing Bounce.” They had predicted spending spillover following the Summer Olympics. That didn’t happen and Sorrell admits the BB “did not materialize to the extent forecast.” Off with their heads!
The WPP CEO then says there is “no doubt that the disintegration in the financial markets” has “accelerated sharply in the last few weeks with the collapse, absorption and restructuring of major commercial and investment banks and financial institutions on both sides of the Atlantic, has had and will continue to have, a significant negative effect on consumer and corporate confidence. As a result, 2009 will be a very tough year.” Sorrell, the master of disaster, sees very shaky times ahead.
Sorrell looks at the “revival of Keynesian economic policy and eclipse of Friedmanite monetarism [and to think his people blew the BB], along with state-directed capitalism, have pumped and will pump massive amounts of liquidity into the system, possibly resulting in as surge in inflation, not unhelpful, at least, in the early stages of an upturn in stimulating economic activity.” Where is Alan Greenspan when you need him?
Shocker of shocker: Sorrell, according to Dow Jones Newswires, warned of layoffs in the U.K. and U.S. as the company commits to faster growing markets in China and India. Is anybody in PRLand publicly talking about layoffs? Excluding Racepoint, which cut 20 percent of its staff this week, it's still unicorns and ice cream in PR.
Sorrell is neither one to mince words nor finesse bad times. Okay, he did do a little dance, saying current budget meetings will “not likely reflect the Armageddon currently predicted by the fall in stock prices.” WPP shares are among leaders of those stocks in the tank.
Hats off to Sorrell, the Straight-Shooter. Good luck in '09 to the gang at Hill & Knowlton, Burson-Marsteller, Cohn & Wolfe and Ogilvy PR.
(Photo: World Economic Forum) |
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